U.S. seaports have mixed reaction to Obama budget

Kurt Nagle, AAPA’s president and CEO, said that a potential bright spot for seaports in the Administration's proposed fiscal 2012 budget is the plan’s heightened commitment to infrastructure investment.

With the release of President Obama’s fiscal 2012 budget, the American Association of Port Authorities American Association of Port Authorities (AAPA) is expressing both optimism and disappointment over various aspects of the budget pertaining to seaports and the efficient, safe and cost-effective movement of freight.

Kurt Nagle, AAPA’s president and CEO, said that a potential bright spot for seaports in the Administration’s proposed fiscal 2012 budget is the plan’s heightened commitment to infrastructure investment. The budget includes a robust, six-year, $556 billion surface transportation authorization proposal, as well as a $50 billion up-front, first-year outlay which provides $2 billion for a National Infrastructure Investments program, similar to TIGER.

Last year, TIGER program grants funded $95 million in seaport-related infrastructure such as roads, rails, bridges, tunnels and navigable waterways that connect with ports.

Among the elements proposed for the Department of Transportation budget would be a National Infrastructure Bank (I-Bank) that would leverage federal dollars and focus on investments in projects of national and regional significance. The I-Bank would provide grants, loans or a blend of both to an expanded list of eligible multi-modal projects, including highway, transit, rail, aviation, seaport and maritime initiatives. An example in the budget’s supporting materials is that the I-Bank could support improvements in road and rail access to ports.

“AAPA applauds the Administration’s desire with the DOT budget to prioritize transportation infrastructure investments. However, we’re concerned that the expanded variety of modes in the I-Bank compared to TIGER could cause funding for seaport-related infrastructure to be overshadowed by high-profile initiatives such as transit and intercity rail,” said Nagle. “There needs to be a heightened federal focus on freight transportation,” he added.

“While we’re optimistic that certain seaport-related infrastructure could be funded through the I-Bank, the Administration’s proposed budget cuts for the U.S. Army Corps of Engineers’ Civil Works program misses the mark by failing to adequately fund the waterside infrastructure that is critically needed to restore the economic security of the nation, increase exports and create the jobs necessary for full economic recovery,” said Nagle.

“Although we’re mindful of the need to make necessary sacrifices to reduce the deficit, we believe the priority for programs and projects that enhance America’s ability to move cargo and compete in world markets should be raised rather than lowered.”

If approved, funding for the Corps’ Civil Works program in fiscal 2012 would drop by more than a quarter-billion dollars to $4.631 billion. That includes a $6 million reduction in the draw from the Harbor Maintenance Trust Fund (HMTF) to $758 million. These cuts are in addition to the Administration’s proposal to expand the authorized uses of the HMTF so that its receipts are also available to finance the federal share of other commercial navigation programs, such as the U.S. Coast Guard.

Nagle is not alone in stating that the President’s FY 2012 Budget submission leaves in its wake more question marks than answers.

“The President has said that he is committed to working with Congress to ensure that funding for surface transportation does not increase the deficit.,” said C. Kenneth Orsski, an analyst who publishes “Innovation NewsBriefs,” and industry newsletter. “This vague expression of intent is hardly appropriate in a Budget message in which Congress expects the Administration to provide concrete proposals for deficit-neutral funding to accompany the President’s programatic initiatves.”

February 17, 2011

About the Author

Patrick Burnson, Executive Editor

Patrick Burnson is executive editor for Logistics Management and Supply Chain Management Review magazines and web sites. Patrick is a widely-published writer and editor who has spent most of his career covering international trade, global logistics, and supply chain management. He lives and works in San Francisco, providing readers with a Pacific Rim perspective on industry trends and forecasts. You can reach him directly at [email protected]

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